Individuals with alcohol and other drug (AOD) disorders frequently suffer from depression, leading to reduced quality of life and poorer AOD treatment outcomes. Efficacious treatments for depression do exist and could improve outcomes; but national data suggest that fewer than 7% of people with co-occurring disorders who are in AOD treatment have received appropriate treatment. Group cognitive behavioral therapy (CBT) is an effective and inexpensive treatment for depression. We propose to investigate whether group CBT for depression, with AOD counselors leading the groups, is effective and cost effective in treating depression. If so, it could substantially increase access to appropriate mental health care. We propose a 5-year quasi-experimental study with the following specific aims: Aim 1. To evaluate the effectiveness of group CBT for depression provided by AOD counselors in improving depressive symptoms and AOD outcomes, among clients being treated in public sector residential AOD treatment settings; Aim 2. To evaluate the cost-effectiveness of group CBT conducted by trained AOD counselors compared to usual care AOD treatment; Aim 3. To document the implementation of the intervention at each of the four sites, and to determine whether the AOD counselors are delivering the group CBT intervention with fidelity to the model, and whether treatment fidelity is a significant predictor of client outcomes. We will enroll and follow 480 clients with Beck Depression Inventory-ll scores > 15 and AUDIT-C scores >3 who are being treated in a single public sector AOD treatment organization at four residential sites in LA County. Subjects will receive one of two conditions: (1) usual care residential AOD treatment (UC); (2) usual care AOD residential treatment plus a 16-session course of group CBT delivered by trained AOD counselors (CBT). Subjects will complete: (1) a baseline interview; (2) a post-treatment interview (at the conclusion of the CBT treatment) and (3) a follow-up interview (3 months after CBT treatment ends). Data will be analyzed using an intent-to-treat model. We will collect data on the service-level costs and health effects associated with UC and CBT, and will calculate the incremental cost per unit of depression and AOD improvement, compared to UC.. The implementation analysis will involve two related sets of activities: (1) a series of key informant interviews to provide a context in which to understand intervention implementation and (2) an assessment of treatment fidelity and it's relationship to client outcomes.